Virgin America Info?

[Tomct]

IMO, Virgin, in its present form, will NOT make it.

Why?

1) No air carrier in history has been successful over the long term by making its labor force bear the costs of the operation. READ: Extremely low pay helps propel the airline to the next level but eventually that poor treatment of employees in a service industry translates to the frontlines and the product suffers.

2) You can't make money in this high oil environment by charging $88 a seat out of SFO. It simply can't be done. Eventually Branson's investors, along with the emloyees, will stop subsidizing people's air travel and stop supporting management's rather uncreative business plan. Reference JBlu... they cannot make money as an airline because their business model is built on cheap fares. You can't continue to lose money forever. In a capitalist society, profit always prevails over all else. Creative destruction results in weaker businesses and industries failing which supports the stronger more innovative models.

3) The training and recruitment costs for any airline are enormous. $30-$50,000 per pilot depending on the carrier. If you create an environment where professional aviators use your company as a revolving door (read: training center) the constant turnover will cost you millions on an annual basis. By this I mean pilots join VA to get the 320 type and flt time then move on when a better opportunity comes along. If you don't pay enough for the retention of your most skilled labor group, it is going to be financially painful in the long run. Couple this with the added dynamic that low-fare/ start-up carriers pay higher salaries to new-hires than the legacy carriers, and one could make the argument that indeed recruitment and training are higher-than-average costs for the start-ups.

All that said, shouldn't this thread be on the LCC boards?

Kind of sounds like the argument of why Southwest's Business model will NEVER WORK! Analysts like yourself lose site of the big picture!
1) Branson has been waiting years too get into the American market. He will do and spend whatever it takes to keep the airline going. Don't forget that it is his 3rd airline...all of which are doing very well.
2) He has the LARGEST WAR CHEST of any airline EVER started!
3) The pilot cost is nearly ZERO due to the fact that he is getting the training from Airbus FOR FREE!!!
4) His bigger picture is too change the face of domestic airtravel...using the JetBlue model and amping it up another notch.
5) Don't forget about Virgin Galactic. That is right, the space travel is just the tip of the iceberg.
Virgin America is going to force every airline in the US to UP THE ANTEE with their domestic product or fall by the way-side! Only time will tell, but judging from his other ventures I dare say he will have continued success in the Airline business.

 

[skiandsurf]

2) He has the LARGEST WAR CHEST of any airline EVER started!

But remember, its NOT Bransons airline or money. Yeah right.

 

[Tomct]

Fairly certain it was around $90-95 an hour, I applied when they first started advertising on the internet in Jan/Feb of 2000 for pilots and vaguely remember that number.

Adjusted for inflation, $90 an hour in 2000 would be $114 an hour today, 1st year pay.

Once things get going over there, you can bet that the money will follow. When SWA started they were not the Highest Paid...Now they are, but not before they had massive growth. Plus if you look and the 5 and 6 year timeframe, they are not far off from all of the other carriers that fly the same equipement!

NW 130 131
UA 124 125
AWA 127 129
US 116 117
F9 133 136
B6 121 127
Spirit 127 129 (A321 rates)
USA 3000 120 122
VIRGIN 115 120
Not too far off.

 

[Tomct]

But remember, its NOT Bransons airline or money. Yeah right.

I know and I am with you...yet it IS! Branson has always said that one of his biggest mistakes that he made in the business world was not being part of JetBlue. Who knows...in the long run that could end up being a merger.

 

[Lear70]

Once things get going over there, you can bet that the money will follow. When SWA started they were not the Highest Paid...Now they are, but not before they had massive growth. Plus if you look and the 5 and 6 year timeframe, they are not far off from all of the other carriers that fly the same equipement!

NW 130 131
UA 124 125
AWA 127 129
US 116 117
F9 133 136
B6 121 127
Spirit 127 129 (A321 rates)
USA 3000 120 122
VIRGIN 115 120
Not too far off.

Ummm... not sure where you're getting your numbers. 1st year Virgin CA pay is $95 an hour, goes up $5 per year to year 6 max.

As far as not being "too far off", it's *only* by 20%, or around $20,000 per year ($24.75 less than the industry average times 900 hours of flying per year on a 75-77 hour monthly credit average which is WAY low).

Or, about the amount of your mortgage. Depends on how you look at it.

/sarcasm

 

[BigMeat]

5) Don't forget about Virgin Galactic. That is right, the space travel is just the tip of the iceberg.

Is that what Branson is telling you. Is he promising you guys the stars? Hey future Galactic traveler have some respect for yourself and and wait for a respectable airline to hire you other than Virgin and Skybus. You want to ride a rocket ship visit a porn shop. This is a real profession that we are trying to up hold and return to at least a glimmer of what it used to be.....

 

[FIREMAN]

Is that what Branson is telling you. Is he promising you guys the stars? Hey future Galactic traveler have some respect for yourself and and wait for a respectable airline to hire you other than Virgin and Skybus. You want to ride a rocket ship visit a porn shop. This is a real profession that we are trying to up hold and return to at least a glimmer of what it used to be.....

This from a King Air driver!

 

[Tomct]

Is that what Branson is telling you. Is he promising you guys the stars? Hey future Galactic traveler have some respect for yourself and and wait for a respectable airline to hire you other than Virgin and Skybus. You want to ride a rocket ship visit a porn shop. This is a real profession that we are trying to up hold and return to at least a glimmer of what it used to be.....

Glimmer...are you on CRACK? Have you witnessed the amount of service lately here in the US? Obviously not! Here is an example....(hi, have a crappy snack pack full of SH!T or better yet...NOTHING for the next 4-6 hour flight.) Yeah...we are bringing it back to a glimmer alright. Not to mention that the ole hag handing you the food is already receiving Social Security. Nice try...go back to flying your little King air!

 

[Tomct]

Ummm... not sure where you're getting your numbers. 1st year Virgin CA pay is $95 an hour, goes up $5 per year to year 6 max.

As far as not being "too far off", it's *only* by 20%, or around $20,000 per year ($24.75 less than the industry average times 900 hours of flying per year on a 75-77 hour monthly credit average which is WAY low).

Or, about the amount of your mortgage. Depends on how you look at it.

/sarcasm

The numbers are from APC. Notice that I said the 5-6 year time frame. I agree that first year pay blows, but for a start-up...what do you expect. They make as much or more than US, Spirit. Again, that is 5-6 year pay. The highest paid (Frontier) is losing money.

 

[JJET44]

Not that it matters much, but it's John Ornstein.
Either way he's a POS!!!

 

[JoeMerchant]

Yup.

Check out airlinepilotpay.com.

It's standard at many carriers in Europe and Cathay does it as well. Unfortunately, since the creators of SkyBus and Virgin are from that part of the world, they see it as standard practice where here in the U.S., it's almost unheard of.
Terrible idea... uke:

Guess who the first 2 carriers in the US were that started the idea of giving up longevity.....??

Independance did it with the Airbus operation, and USAirways did it with the MidAtlantic fiasco....It was started in this county by ALPA carriers......

Back to the "don't undercut me"......argument.......

 

[Lear70]

The numbers are from APC. Notice that I said the 5-6 year time frame. I agree that first year pay blows, but for a start-up...what do you expect. They make as much or more than US, Spirit. Again, that is 5-6 year pay. The highest paid (Frontier) is losing money.

Whoa, wait a second... you're all over the map so let me make sure I understand you...

You're talking about a startup and what they make on 5 or 6 year pay... Which no one's going to be at for 5 or 6 more years? Aren't you all on 1st year pay? Why are you skipping forward 5 years up the progression? Don't like that the pay scale is in double digits to start? Heck, I wouldn't either.

Secondly, have you ever heard of that little thing called "inflation"?

$115 an hour 5 years from now is the equivalent of making $98 NOW. So, you'd be happy getting the equivalent of a $1.20 raise per year when adjusted for COLA?

nice...

Second, are you insinuating that Frontier is losing money because of their pilot pay?

You DO understand how CASM works, right? 'Cause if you did, I know you wouldn't try to correlate pilot pay to profitability.

Pilot pay impacts the bottom line of a company by about 1.5%. If your margin is SO tight that being paid 10% higher than the industry average (which equates to about a .15% increase in TOTAL CASM) is going to make or break you, then I submit that your entire business model is flawed.

Airlines don't make or lose money based on pilot compensation. Those of you who think that "taking one for the team" and accepting sub-standard wages somehow saves your company need to stop drinking the company kool-aid.

There's a distinct line between asking for a respectable wage and being greedy. Your company can afford it. I promise.

 

[JoeMerchant]

Gee...I thought a "scab" was a person who has crossed a picket line to do struck work.

......on Flight Info...."scab" means:

"You suck....I hate you....only I am allowed to undercut someone else....."

 

[737 Pylt]

Gee...I thought a "scab" was a person who has crossed a picket line to do struck work.

There are those that are worse.....How about a group who tries to sue to get around your legal PWA, and trying to abolish scope so that they can fly bigger planes for less.....Actually they're worse than scabs, because at least a scab waits until you're on strike before trying to take your job!

737

 

[JoeMerchant]

There are those that are worse.....How about a group who tries to sue to get around your legal PWA, and trying to abolish scope so that they can fly bigger planes for less.....Actually they're worse than scabs, because at least a scab waits until you're on strike before trying to take your job!

737

Even worse are mainline pilots who undercut regional pilots to fly "little airplanes".....can you imagine.......

 

[737 Pylt]

Even worse are mainline pilots who undercut regional pilots to fly "little airplanes".....can you imagine.......

At least they don't sue.....Because they can't get hired anywhere else!

737

 

[Pilotbob3]

dont forget!!! JB pays time and a half over 70 hours!

 

[Green Banana]

Yes VA pay is lower that most. but where I am it is a 12 year upgrade and reserve is 3 years. At VA I can get a line in a month, upgrade in 1 year and make more at their low captain pay than at my "Major Airline" FO pay. If VA stays around they will migrate to industry standard and the pilots will unionise if not treated fairly.

 

[Tomct]

My point Lear, is that if you are hired at VA within the next year, you will most likely be in the left seat before the end of that year. It also would put you in the top of the pilot group for your ENTIRE career which means better QOL.
Very few get the opportunity to start up a good company. Look at the upper echelon of the JetBlue group. You can stay where ever you are, but I will not throw stones at a glass house when Every ALPA carrier has Caved one way or the other! I have friends over there and do not fault them for their choice. Why run to a Major now when they will be furloughed within a year...if these mergers get approved, which they will. YOUR CHOICE!!

 

[imlars]

$

Well there is always the $30hr majors with 28yr upgrades and crashpad livin'.

lars